Financial (Investment) Plan Manipulation

Financial Plans can be altered to sell investment clients and prospects on new investment ideas or staying on a current course with a Financial Adviser by showing misleadingly rosy computer generated long term wealth accumulation outlooks. 

An example of a Financial Plan summary attached to client monthly statements;

In 2012, a Wells Fargo Envision Investment Plan Sales Manager said “There are 441,942 households with Envision Plans of Record.” and “The overwhelming majority of Envision Plans do not include investment costs."

If “the overwhelming majority of Envision Plans didn't include investment costs” and unachievable goals have been 'legally' presented to clients, hundreds of thousands of Wells Fargo clients and millions of others may be misinformed of the probabilities of achieving financial goals presented by Financial Advisors across the globe. 

As shown after the third main bullet point below, what was called Wells Fargo's “Annual Investment Fee” was changed to the vague "Return Discount Rate" to convolute understanding;

 

The following document states: "If left at 0%, the Return Discount Rate will not be displayed on any Envision report pages. If you choose a Return Discount Rate above 0%, this assumption will be displayed on the Investment Plan Assumptions report page."

Meaning if the "Return Discount Rate", otherwise known as Annual Investment Fees aren't included, the information is not reflected in client presentations;

Example; The following shows a comparison of two reproducible versions of the same Plan with one difference; Including the fees the client was paying, and not including them. 

"Harold Lynn" had $1,000,000 invested, and paid total Annual Investment Fees of 2.5%, stated as the Return Discount Rate;

With a 10% annually compounded return with 2.5% extracted for fees each year, Harold would have $8,754,955 in 30 years;

The same "Harold Lynn" with $1,000,000 invested, but the 'Return Discount Rate' doesn't show up as the Annual Investment Fees weren't included;

With a 10% annually compounded return, Harold could erroneously believed he could have $17,449,402 in 30 years;

The first example includes the 2.5% annual investment fees Harold was paying. The second doesn't. Excluding the investment fees makes Harold's future appear more prosperous than reality.

If “The overwhelming majority of Envision Plans do not include investment costs", which plan do most Financial Advisors show clients?

The Wells Fargo Envision Plan including what Harold was actually paying would need to begin with about $840,000 more to achieve his goals, meaning the plan not including the 2.5% annual investment fees was misleading. 

Wells Fargo information is public record.